Prime Minister Narendra Modi's government presents its first budget shortly amid apprehensions about a dose of "bitter medicine", which could be administered to revive an ailing economy that has clocked sub-5% growth in two consecutive years.

The Union cabinet approved the budget
after its first copies reached the Parliament on Thursday morning as finance minister Arun Jaitley arrived in the House after paying a visit to Rashtrapati Bhawan and the finance ministry.

The BJP government, which secured a landslide victory in the 2014 general elections, had struck a note of optimism on Wednesday, forecasting that India will grow at 5.4-5.9% in 2014-15. But, it had also admitted that spinning jobs for teeming millions will be a challenge.

Live Blog Live coverage of Union Budget 2014

Jaitley is thus faced with the task of juggling long-term economic reforms, boosting growth in the face of a possible weak monsoon and creating jobs in order to usher in the 'achche din (good days)' promised by the BJP in its election campaign.

"The defining challenge in India today is that of generating employment and growth," said the annual Economic Survey 2013-14 tabled in Parliament on Wednesday.

Notably, India added only 15 million jobs during 2005-12 - which is in a sharp contrast to the 60 million jobs created between 1999 and 2005.

"Good quality jobs are created by high-productivity firms," the survey said, adding a return to 7-8% growth was possible only after 2015.

Barely two months into office, but the clock is already ticking for the government to come good on poll promises. It will be interesting to see how the new finance minister balances the books, without hurting India's vast consuming class and limited legroom to splurge on populist welfare measures.

The Economic Survey report has triggered speculation that Jaitley will announce a higher fiscal deficit target.

"The Economic Survey 2013-14 conveys a sense of urgency about the course the economy needs to undertake," Arvind Mayaram, finance secretary, wrote in the foreword to the report.

Jaitley's predecessor set a target of keeping the fiscal deficit to 4.1 % of gross domestic product (GDP), the total value of all goods and services produced within the country's boundary, in an interim budget.

In seven of the last eight quarters India's GDP has grown at less than 5%, hit by a toxic mix of high inflation, costly loan rates and poor services and industrial sector growth.

The survey called for a revamp of the taxation system through new laws, goods and services tax and direct taxes code.

"Bad taxes" such as surcharges, cess and dividend-distribution levy need to "eventually go" to boost investments and growth.

Tushar Poddar, chief India economist at Goldman Sachs, wrote this week that he expected a roadmap for a Goods and Services Tax, greater access for foreign investors to the insurance and defence industries and incentives for manufacturing, according to a Reuters report.

"We want Mr. Modi and his team to make a structural change by presenting a budget crowned with quality actions," the news agency quoted Spain's BBVA Research as mentioning in a research note.